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November 26, 2008

“The Eight Years War”

Kevin E. Dayhoff

At high noon on Monday, amid cries of alarm that this is the worst economic crisis since the Great Depression, President-elect Barack Obama rolled out his all-star economic team and a call for an economic stimulus package that could cost as much as $1 trillion.

In the current economic and political climate, President-elect Obama will take office on January 20, with a lock-step sycophant Congress, trillions of dollars at his disposal and, in essence, unparalleled power.

Perhaps another way to look at it is to realize that – under the cover of the rhetoric – our nation is in an historic crisis. President-elect Obama will lead our nation in the direction of a full-tilt European social-welfare democracy.

This did not happen overnight. It is the culmination of two-years of hard campaigning and eight years of an all-out civil war against the administration of President George W. Bush and the Republican Party. Historians may very well call it the “Eight Years War,” which ended in the bloodless overthrow of the United States government.

All hyperbole aside, every time President-elect Obama says “economic stimulus” and the “worst financial condition since the Great Depression,” please understand this translates into the introduction of the biggest changes in the federal government since the New Deal in the 1930s.

As the Democratic nominee for president, Illinois Senator Obama persistently drove home his canned campaign rhetoric that our nation is in the worst financial crisis since the Great Depression.

It was an astute political decision on his part as it increased the perception in the minds of the American voter that it was imperative that the nation make a change in leadership at the top – and to be sure, the change Senator Obama had in mind was that he be elected president.

As early as last August 5, then-Senator Obama said: “We are in the worst financial crisis since the Great Depression, and a lot of you I think are worried about your jobs, your pensions, your retirement accounts…”

This was a month before September 15 when Lehman Brothers announced that it would file for bankruptcy…

On Monday, President-elect Obama maintained the campaign decorum and said: “We are facing an economic crisis of historic proportions… If we do not act swiftly and boldly … we could lose millions of jobs next year… Our economy is trapped in a vicious cycle. The economy is likely to get worse before it gets better… These extraordinary stresses on our financial system require extraordinary policy responses… I've sought leaders who could offer both sound judgment and fresh thinking…”

Questions abound. What exactly is the meaning of “extraordinary policy responses” and “fresh thinking?”

The economically curious among us would like to know that if the nation was in the worse financial crisis since the Great Depression on August 5, how does one describe the economic condition of the country today.

Maybe it is the worst since the “Panic of 1797.”

Hmmm. That would overlook what was perhaps the worst depression in the country’s history, the 1873-1896 “Long Depression,” which lasted for 23 years after the “Panic of 1873.”

Or maybe the nation is in the worst shape since the recession-depression that resulted from the “Panic of 1837,” which lasted six years and especially ravaged the economy of Central Maryland.

In a case of the “Panic of 2008,” looking like “déjà vu all over again,” in the early 1830s, banks recklessly and carelessly loaned money to individuals and businesses that lacked credit worthiness, thereby increasing the money supply to unsustainable levels.

It all crashed on May 10, 1837, when “Out of 850 banks in the United States, 343 closed entirely, 62 failed partially,” according to historian Hubert Bancroft in Volume III of “The Great Republic.”

In example after example, it becomes clear that our nation has faced extraordinary financial challenges throughout its history. Economic historians readily recognize at least 18 severe economic disruptions since 1797.

With the exception of the Great Depression, our nation’s government was not thrown out the window in response. So why are we considering scraping the government now?

To be sure, conservatives would rather see tax cuts, especially for capital gains, as a component of an economic stimulus. The United States has the second highest corporate tax rates in the world. It may surprise many to know that our corporate and capital gains taxes are higher than communist China.

Liberals want to exponentially increase spending and are still looking forward to increasing the taxes on the largest concentrations of capital in the country. In essence, this reroutes capital away from jobs creation and into the hands of a Congress – central government – firmly controlled by the Democratic Party.

That would be the very same Congress that created much of the mess in which we currently find ourselves – with an approval rating that continues to hover around 18 percent.

At this point, unless cooler heads prevail, the liberals that seized power in the national elections several weeks ago are proposing an increased bureaucracy and regulations – “big government,” increased taxes, roadblocks to international free market trade, empowering unions, a central-government controlled economy, redistribution of wealth, and essentially the nationalization of the banking and auto industries.

They are so anxious to get the revolution started that last Saturday; Gail Collins wrote an op-ed column in The New York Times that called on President Bush and Vice President Dick Chaney to resign and turn over the government to House Speaker Nancy Pelosi.

And to think that we thought we had a national election on November 4. Who knew it was really a referendum to scrap the constitution?

Little did we know that while conservatives thought they lost the election, liberals began a coup d’etat. At least the “Eight Years War” will be over and tranquility, peace, and prosperity will ensue in the “Age of Obama.”

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